2) On the housing front, sales are still down, and inventory is
rising, all the while home prices continue to fall. For the first
quarter of this year, they were down 14.1%.
Lowered prices are causing buyers to come out of the woodwork, as
bargain hunters have sent home sales up 6.3% in April from March. In
bad news, housing starts fell to their 1991 lows, down 3.3% in May, Patrick Rucker for Reuters reports.
There have been mixed signals about the health of the sector across the
country: in the Northeast, for example, housing starts jumped 61.5%.
But starts in the Midwest were down 25%.
When the housing market is once again on solid footing, some of the funds investors can use to take part: SPDR S&P Homebuilders (XHB) and DJ Wilshire REIT (RWR). The funds are respectively down 9.4% and 2.2% year-to-date.
3) China may be full of surprises for the last part of 2008, as they are still a growing nation despite recent hiccups.
Deutsche Bank’s economist raised his 2008 and 2009 GDP forecasts to
0.7% and 0.4%, respectively. Moreover, the recent quake should deliver
a boost as reconstruction begins.
As for the Olympics, plenty of countries have suffered a post-Olympics hangover, but that’s not likely in China, say Alan Wheatley and Chris Buckley for Reuters.
That’s because Beijing accounts for just 3.7% of Chinese GDP, and
Olympics-related capital spending was only 1% of nationwide investment
from 2003-2007.
Funds to watch if China mounts a firm turnaround in the second half of this year: iShares FTSE/Xinhua China 25 (FXI) and SPDR S&P China (GXC), which are down 20.4% and 23.3% year-to-date, respectively.
